NZD/USD Binary Call Option – November 21st 2014
GOption | Nov 21, 2014 02:21AM ET
Today’s Binary Options Trading Strategy:
• Currency Pair: NZD/USD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 0.7875
• Upside Potential: The upside potential for this binary call option is 100 pips to 0.7975
• Downside Potential: The downside potential for this binary call option is 70 pips to 0.7805
The NZD/USD has recently moved away from its intra-day high of 0.7974 which was reached on November 17th 2014. Prior to this move the NZD/USD enjoyed a strong move higher after it reached an intra-day low of 0.7660 which was reached on November 7th 2014. The move to the downside was initiated amid temporary strength in the US Dollar, but was halted by its ascending support level which intersected its horizontal support level from where it managed to drift upwards.
Price action has now drifted just outside its horizontal support level, but may test its horizontal support level as well as ascending support level once again. The NZD/USD is expected to maintain its upward momentum and continue to advance. Binary options traders can take advantage from the expected continuation of the advance with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.7875 for a risk/reward ratio of 1.0/1.43.
The NZD/USD has enjoyed a low volatility trading environment, but volatility is expected to increase especially as price action will approach its ascending support level once again. Sellers are anticipated to attempt a breakdown in order to reverse the overall upward momentum in this currency pair. Buyers are expected to use the current strength of the ascending support level coupled with its horizontal support level as a solid platform to advance until it reaches is most recent intra-day high. This favors binary call options in the NZD/USD currency pair.
The first resistance level awaits the NZD/USD at its descending resistance level around 0.7885 from where a breakout will take this currency pair to its intra-day high of 0.7905 which was reached on November 12th 2014. The next resistance level is located at its intra-day high of 0.7958 from where a final breakout will take the NZDUSD to its intra-day high of 0.7974 which was reached on November 17th 2014 from where a double top formation will challenge a further advance.
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The following economic data out of New Zealand already impacted the base currency, the New Zealand Dollar, of the NZD/USD currency pair:
Credit Card Spending for the month of October:
• Expectations: A monthly increase of 0.3%, an annualized increase of 4.6%
• Previous Report’s Data: A monthly increase of 0.2% was reported in September, an annualized increase of 4.5%
• Released Data: A monthly increase of 1.3%, an annualized increase of 6.7%
• Impact on the New Zealand Dollar: The strong expansion in credit card spending suggests strength in the New Zealand consumer which lifted the New Zealand Dollar; this favors binary call options in the NZDUSD currency pair
In addition the following economic report out of the United States is expected to impact the quote currency, the US Dollar, of the NZD/USD currency pair:
Kansas City Federal Reserve Manufacturing Activity Index for the month of November:
• Expectations: A reading of 6 is expected for the month of November
• Previous Report’s Data: A reading of 4 was reported for the month of October
• Impact on the US Dollar: Expectations for the Kansas City Federal Reserve Manufacturing Activity Index may be too optimistic as other regional manufacturing reports underperformed and this could pressure the US Dollar to the downside, which favors binary call options in the NZD/USD currency pair
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